This year is going to be an interesting one for Apple, as far as its flagship iPhone goes.
We’ve known for quite some time that 2017 isn’t going to be a typical release period, because instead of just one new model of phone, we’re technically getting two. The rumor mill has been straightforward in its assumption that Apple will launch “S” variants of the iPhone 7 and a brand new iPhone 8.
That already means things are going to be quite different for the company this year, but the rumor mill hasn’t stopped there, of course. It’s been a few months now since we first heard that Apple could price its upcoming premiere handset at $1,000 or more, and even more reports after that pointing to price hikes for some of the iPhone 8’s parts, seemingly corroborating those rumors that the next flagship smartphone would be pretty pricey.
John Gruber of Daring Fireball recently posted on Twitter that he believes the iPhone 8, or whatever Apple ends up calling it, could cost upwards of $1,500. He took to his website to flesh out the idea, though, and came to the conclusion that maybe the iPhone 8’s top-end model –the one with the most built-in storage– would cost around $1,400.
As usual, Gruber articulates his position quite well and raises plenty of points. The main gist of the argument is that Apple is going to face supply constraints, which we’ve certainly heard already, and that Apple is going to have a pretty common story of supply-and-demand. If the company can’t manufacture as many iPhone 8 models to match demand when the phone is priced somewhere similarly to the iPhone 7/7 Plus are currently priced, then jacking up the price may help alleviate pressure.
The other argument he raises is the fact that the rumor mill, and buoyed by analyst reports, points to Apple not just launching lower-priced iPhone 7/7 Plus models, but true follow-ups in the iPhone 7s/7s Plus. That means those devices will be priced the same as the current iPhone models, and, as Gruber points out, if the iPhone 8 is priced too close to the 7s/7s Plus, why would most people opt for anything other than the iPhone 8?
There will be some people out there that would go for the iPhone 7s option, even if it is only saving $30-$100, and maybe because they prefer that design over whatever Apple unveils with the iPhone 8. But it’s safe to assume that a vast majority of potential iPhone buyers will go for the iPhone 8, especially if it starts at $999 — just $30 more than the top-tier iPhone 7 Plus.
It’s been reported that Samsung is working diligently on manufacturing OLED display panels for Apple, upwards of 70 million of them as reported back in April. Gruber’s argument that the new flagship iPhone will face supply constraints isn’t completely out of line, of course, and he’s probably right. Even the iPhone 7 Plus was hard to get for quite some time following its arrival last year, so it’s safe to say the iPhone 8 will be even more difficult to find this year.
I can honestly say that I’m on the fence with this one. I agree with some folks that pricing a phone at $1,000 or more might be a tough sell, but then again carriers have made it a bit easier to accept high prices for devices thanks to installment plans of all kinds. But this is also Apple we’re talking about, so anything is possible — especially when it comes to pricing.
This part from Gruber stands out to me, though:
“On the other hand, without question, this “new premium tier” strategy that I’m suggesting poses its own significant risk for Apple. The mere existence of the new edge-to-edge OLED iPhone could dampen excitement for the iPhone 7S and 7S Plus, leading to a decrease in overall sales. “I don’t want a 7S because it’s boring, but I don’t want to spend $1,200 on an iPhone Pro/Edition because that’s too much for a phone, no matter how nice it is.” That sentiment could be trouble for Apple.”
I’ve already seen this sentiment a few times on social media following Gruber’s statements. “I’m not spending $1,000+ for my phone, and I’m not buying the phone that isn’t the best model possible.” And this is why I think it’s going to be an interesting year for Apple, in terms of the iPhone. I also think it’s probably the easiest question to ask a potential iPhone buyer:
If the iPhone 8 costs $1,000+ or more, will you buy it? And if not, would you pick up the iPhone 7s or iPhone 7s Plus instead? Or would you simply avoid buying an iPhone in 2017 due to the flagship model being priced too high?
